Exhibit
10.1
 REGENCY
AFFILIATES, INC.
  STOCK OPTION
AGREEMENT
  THIS
STOCK OPTION AGREEMENT (this “Agreement”) dated as of December 17, 2008 (the
“Grant Date”), is between Regency Affiliates, Inc., a Delaware corporation (the
“Company”), and Errol Glasser (the “Participant”), relating to options to
purchase shares of Stock, which options are granted under the Regency
Affiliates, Inc. 2003 Stock Incentive Plan, as amended (the
“Plan”).  Capitalized terms used, but not otherwise defined, in this
Agreement shall have the meanings ascribed to such terms in the
Plan.
  I.           
  Grant of
Stock Option, Option Price and Term.
  The
Company grants to the Participant a Non-Qualified Stock Option to purchase 5,000
shares of Stock of the Company (“Option Shares”) at a price of $2.60 per share
(“Option Price”), subject to the provisions of the Plan and the terms and
conditions herein.  The term of this Stock Option shall be a period of
10 years from the Grant Date unless earlier terminated as provided herein and in
the Plan (the “Option Period”).  Subject to the provisions contained
herein and in the Plan, the Stock Option shall become exercisable immediately
upon the Grant Date.
  The Stock
Option granted hereunder is designated as a nonqualified stock option which is
not transferable by the Participant except to a Family Member, as provided in
Section 4 of the Plan, or by will or the laws of descent and
distribution.
  II.       
     Exercise.
  The Stock
Option shall be exercisable during the Participant’s lifetime only by the
Participant (or his Representative), and after the Participant’s death only by a
Representative.  The Stock Option may only be exercised by the
delivery to the Company of a properly completed written notice, in form
satisfactory to the Committee, which notice shall specify the number of Option
Shares to be purchased and the aggregate Option price for such shares, together
with payment in full of such aggregate Option Price.  Payment shall
only be made as specified in the Plan.  If any part of the payment of
the Option Price is made in shares of Stock, such shares shall be valued by
using their Fair Market Value as of the date of exercise of the Stock
Option.
  
  The Stock
Option may not be exercised unless there has been compliance with all the
preceding provisions of this Section 2, and, for all purposes of this Agreement,
the date of the exercise of the Stock Option shall be the date upon which there
is compliance with all such requirements.  The Committee may deny any
method of exercise permitted hereunder if such method would result in liability
under Federal or state securities law to the Participant or the Company, result
in an expense charge to the Company or prevent the use of pooling of interest
accounting.
  III.           Payment of Withholding
Taxes.
  If the
Company is obligated to withhold an amount on account of any tax imposed as a
result of the exercise of the Stock Option, the Participant shall be required to
pay such amount to the Company, as provided in the Plan.  The
Participant acknowledges and agrees that he is responsible for the tax
consequences associated with the grant of the Stock Option and its
exercise.
  IV.           Changes in Company’s Capital
Structure.
  The
existence of this Stock Option will not affect in any way the right or authority
of the Company or its stockholders to make or authorize (a) any or all
adjustments, recapitalizations, reorganizations or other changes in the
Company’s capital structure or its business; (b) any merger or consolidation of
the Company’s capital structure or its business; (c) any merger or consolidation
of the Company; (d) any issue of bonds, debentures, preferred or prior
preference stock ahead of or affecting the Stock or the rights thereof; (e) the
dissolution or liquidation of the Company; (f) any sale or transfer of all or
any part of its assets or business; or (g) any other corporate act or
proceeding, whether of a similar character or otherwise.
  In the
event of a Change in Control or other corporate restructuring provided for in
the Plan, and the Committee shall take such actions, as are provided for in the
Plan.
  V.            
Plan.
  The Stock
Option is granted pursuant to the Plan, and the Stock Option and this Agreement
are in all respects governed by the Plan and subject to all of the terms and
provisions thereof, all of which terms and provisions are made a part of and
incorporated in this Agreement as if they were expressly set forth
herein.  Any capitalized terms not defined in this Agreement shall
have the same meaning as is ascribed thereto under the Plan.  The
Participant hereby acknowledges receipt of a true copy of the Plan and the
Participant has read the Plan carefully and fully understands its
content.  In the event of any conflict between the terms of this
Agreement and the terms of the Plan, the terms of the Plan shall
control.
  VI.           Employment
Rights.
  No
provision of this Agreement or of the Stock Option granted hereunder shall give
the Participant any right to continue as a director of the Company or any
Affiliates, created and inference as to the length of directorship of the
Participant, affect the right of the Company or any Affiliates to terminate the
provision of services of the Participant, with or without Cause, or give the
participant any right to participate in any employee welfare or benefit plan or
other program (other than the Plan) of the Company or any
Affiliate.
  2 of
4
  VII.          Governing
Law.
  This
Agreement and the Stock Option granted hereunder shall be governed by, and
construed and enforced in accordance with, the laws of the State of Delaware
(other than its laws respecting choice of law), except to the extent Federal
laws would be mandatorily applicable.
  VIII.        Waiver; Cumulative
Rights.
  The
failure or delay of either party to require performance by the other party of
any provision hereof shall not affect its right to require performance of such
provision unless and until such performance has been waived in
writing.  Each and every right hereunder is cumulative and may be
exercised in part or in whole from time to time.
  IX.           Notices.
  Any
notice which either party hereto may be required or permitted to give the other
shall be in writing and may be delivered personally or by mail, postage prepaid,
addressed to the Secretary of the Company, at its then corporate headquarters,
and the Participant at his address as shown on the Company’s records, or to such
other address as the Participant, by notice to the Company, may designate in
writing from time to time.
 [Remainder
of page intentionally left blank.  Signature page
follows.]
  3 of
4
  IN
WITNESS WHEREOF, the Company has caused this Stock Option Agreement to be duly
executed by an officer thereunto duly authorized, and the Participant has
hereunto set his hand, all as of the day and year first above.
  REGENCY
AFFILIATES, INC.
 
 
 /s/
      Laurence S. Levy
                  
                  
                  /s/
      Errol GlasserName:
                  Laurence
      S. Levy
                  
                  
                  Errol
      GlasserTitle:
                  Chief
      Executive Officer
                  
                  
                  Participant